The Manager’s Guide to Communicating Compensation Changes to Employees

The Manager's Guide to Communicating Compensation Changes to Employees

Learn how to communicate changes to your commission plans with strategy, transparency, and empathy.

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The only consistent aspect of sales commission is change. While this is a common joke among those who work in variable compensation, it's one that hits close to home.

Every business strategy goes through changes - but when these changes directly affect someone's paycheck, the process becomes more sensitive. But that doesn't mean it has to be painful. In this article, we'll break down four key considerations to help you effectively communicate changes around compensation to your team.

Key considerations for communicating compensation changes

Keep in mind: these considerations aren't going to remove all of the friction surrounding your compensation changes. And, unfortunately, there's no one-size-fits-all miracle solution. But these tried-and-true principles have helped many compensation managers navigate change successfully.

Involve your team in the conversation about compensation changes early in the process

Changes to commission plans can happen for a number of different reasons. The most common include shifts in company strategy, budget adjustments, new features or products, etc. Because of this, they can also happen at any given time. For this reason, we recommend that you involve your team early on in the discussions so they don't feel blindsided or unnecessarily apprehensive.

Teams respond better to change when they aren't blindsided by it. Involving them early lets them know you are making these changes with them in mind.

It's important to communicate consistently throughout the planning process. That way, your teams continue to feel like they are a part of the conversation and decision-making process. The efforts you invest in your initial communication will be wasted if you don't maintain and nurture that line of communication.

When you change the way people get paid, it's important to understand the planning and preparation required in their personal lives that inevitably happens as a result. Keeping your team involved will help them get a better sense of what is coming. Plus, allowing your team to take time to adjust will make the coming changes easier to handle.

Collect feedback about the compensation changes you plan to make

Another important aspect of communicating compensation changes to your team is to make it a two-way conversation. In other words, you shouldn't just dictate changes related to your variable comp plans. Instead, be sure to get feedback throughout the process. Present the business case to the team and solicit opinions about how they'd solve it.

Even if you don't end up using their suggestions, involving them will pay dividends in the future. Open it up, make it fun, give your team a voice. They will probably surprise you with effective ideas you haven't considered.

Be concise and transparent when communicating compensation changes

Once the changes are finalized, don't beat around the bush. Present the changes and walk your employees through why these changes are made and how they'll be impacted by them. Make sure you tell your team the full story, walk them through different scenarios that these changes might facilitate, and make sure you put it as simply as possible.

From there, your plan for ongoing communication is perhaps even more important than the initial delivery and rollout of the changes. Understand that people will have questions and make sure they have channels in place to receive answers.

Prioritize consistent follow-up

Don't just sit back and wait for your team members to ask you questions about changes - make sure you proactively follow up with them. Oftentimes you won't learn about mistakes or issues until after they have been impacting people for a while. Create an anonymous way for your employees to voice their opinions, file complaints, or even submit positive feedback.

Having consistent follow-up will help create a culture that is more comfortable with change. When employees feel blindsided by change and that change is never discussed or revisited, you'll find you have more unhappy employees and risk high rates of sales turnover. Keep your communication open, transparent, and accessible to ensure a happier, more engaged team.

Create a method for communicating compensation changes that drives better employee experience

Change is inevitable, especially in the dynamic world of sales compensation. The way you facilitate that change can make the difference between a positive sales employee experience and a negative one. It's not too difficult - just establish a clear communication strategy, make commissioned employees feel heard, and show empathy and sensitivity through every stage of the process.

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Molly is an experienced marketer and content professional with more than 12 years of B2B SaaS experience covering topics related to revenue generation, sales operations, GTM strategy, organizational alignment, and more.